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In simple terms pre-approved bad credit home loan are home loans sanctioned to poor credit holders, on the basis of pre-approval. It is worth mentioning in this regard that getting pre-approved gives you an actual picture of the financial situation you are in and what your borrowing limit is. As a matter of fact you can also form a clear idea of how much you'd have to pay every month if you borrowed as much as you want. There is no denying that this enables you to decide how much you can safely borrow and stay out of debt.

If experts are to be believed pre-approval involves the process of submitting your financial information to your money lender before purchasing a home. There is no hiding the fact that pre-approved bad credit home loans make the home buying procedure easy, saving money and time.

In an ideal scenario to obtain a pre-approved bad credit home loan, you should first submit a loan application to the lender mentioning your personal and financial needs. In addition you also present copies of documents such as purchase agreement, tax returns, housing expenses, reason for poor credit, bankruptcy papers, and copies of credit reports. Point to be noted in this regard is that the lender verifies the application on the basis of your employment information, financial status, credit history, liabilities, and assets. Furthermore it is worthwhile remembering that after completing the application process, you will get a written document showing the amount, interest rate, and down payment according to the terms of the lender.

Theoretically speaking there are many lenders who specialize in pre-approved bad credit home loan. Fact remained that depending on the lender, you are required to pay an up-front fee for processing, closing costs, and appraisal. More often than not closing costs include title searches for deeds, processing documents, and legal fees.

There is no denying that pre-approved bad credit home loans have numerous benefits. As a matter of fact once you are pre-approved, it gives you strong negotiating powers. In addition the required time period for the pre-approval process varies from sixty to ninety days.

In case if you have bad credit history and are looking to get a home mortgage loan, then chances are you are going to need to know all about how the FICO credit scoring system works.

FICO In an ideal scenario Fair ISAAC & Company is the leading credit reporting agency that lenders turn to when it comes time to credit scoring your home loan mortgage application; so if you do have bad credit history, these guys will know.

It is worth mentioning in this regard that the formula used by FICO cannot be disclosed because of a decision made by U.S. Congress. Always remember that there are some things generally known about FICO that that could help you understand why and how you can get approved:

1. The common thumb rule in this regard is the higher your FICO score, the better chance you have of getting that home mortgage loan. Also, it is worthwhile remembering that the higher your score, the more room you have to negotiate a lower interest rate.

2. On the other side of the coin if you have a FICO score lower than 500, there is very little chance youll be getting a mortgage home loan.

That said, always remember that if you have a score in the range of 500 600 you should be able to get a home mortgage loan, provided you are willing to make a down payment.

On the other side of the coin, if you have score in the range of 600 640 you should get a 100% home loan financing. You heard it right, with no money down.

640 - 700: In that scenario you should be able to be approved for a 125% home mortgage loan .As a matter of fact you should be able to get an excellent rate with excellent terms.

3. Point to be noted is that FICO depends on each credit report, so before you apply for a home mortgage loan, if you have bad credit history, get a copy of your credit report and make sure there is nothing on there that shouldnt be there. According to experts if there is, get it changed before you apply for the home mortgage loan.

4. It is of utmost importance that you wait until after you have purchased or refinanced your home before you buy anything additional on credit. There is no denying that more loans or higher balances can have a dramatic effect on your mortgage approval, regardless of whether or not you had over a 600 FICO score before you bought on credit.

5. It is worthwhile pointing that the FICO score is only a part of your home mortgage loan application, so if at first you dont succeed in getting your home loan mortgage, dont give up. Fact remained that some lenders may still be willing to lend to you!

There is no hiding the fact that people with bad credit often don't understand how the credit scoring system works. That is the reason it is beneficial to find out more about it when looking to get a home loan with less than perfect credit to bad credit or when dealing with sub prime mortgage lenders.

In case if you are a homeowner in need of a home equity loan but you have not yet built up any equity in your home, don't despair. Theoretically speaking a 125 percent equity home loan may be the answer.

More often than not a 125 percent equity home loan is a second mortgage loan that allows you to borrow up to 25% more than the value of your home loan. To illustrate this point, consider an example, if your home is worth $100,000 and you owe $100,000 on the mortgage, this loan program would allow you to still borrow up to $25,000.

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